Massive flight cuts at SAA

The business rescue practitioners (BRPs) of South African Airways (SAA) have announced a number of initiatives to support the airline’s turnaround plan.

These include cutting a large number of flights to improve profitability as well as reducing the number of employees.

“The BRPs, Les Matuson and Siviwe Dongwana, have worked closely with key stakeholders including industry specialists, government, creditors and executive management to develop a comprehensive restructuring programme which will culminate in a Business Rescue Plan to be published in late February and subsequently presented to creditors for approval,” the BRPs said.

“In line with SAA’s commitment to take urgent action to conserve cash, and create a viable platform for a successful future, key measures need to be implemented now,” they added.

“These measures include targeted changes to the route network, deployment of more fuel-efficient aircraft, optimisation of organisational structures and renegotiation of key contracts with suppliers.”

Flight cuts

The BRPS said they have conducted a careful analysis of SAA’s challenges and have chosen to maintain the following international routes:

  • Johannesburg – Frankfurt
  • Johannesburg – Heathrow
  • Johannesburg – New York
  • Johannesburg – Perth
  • Johannesburg – Washington via Accra

The following regional routes will also be maintained:

  • Johannesburg – Blantyre
  • Johannesburg – Dar es Salaam
  • Johannesburg – Harare
  • Johannesburg – Kinshasa
  • Johannesburg – Lagos
  • Johannesburg – Lilongwe
  • Johannesburg – Lusaka
  • Johannesburg – Maputo
  • Johannesburg – Mauritius
  • Johannesburg – Nairobi
  • Johannesburg – Victoria Falls
  • Johannesburg – Windhoek

“On the domestic route network, SAA will continue to serve Cape Town on a reduced basis,” the BRPs said.

“All other domestic destinations, including Durban, East London and Port Elizabeth, will cease to be operated by SAA on 29th February 2020.”

The BRPs added that domestic routes operated by Mango will not be affected by these changes.

All customers booked on any cancelled international and regional routes will receive a full refund, the BRPs said.

“Customers booked on cancelled domestic flights will be re-accommodated on services operated by Mango.”

SAA does not intend to make any further significant network changes, and the BRPs said that passengers and travel agents can therefore feel confident about booking future travel with South African Airways.

Job cuts

The BRPs added that rationalisation programmes are under consideration for SAA’s subsidiaries, as well as the sale of selected assets, adding that they will continue to explore viable investment opportunities with potential investors in respect of SAA.

A number of jobs will have to be cut as part of the airline restructuring, but the BRPs said that every effort is being taken to limit the impact of job losses in SAA and its subsidiaries.

“It is our intention to restructure the business in a manner that we can retain as many jobs as possible. This will help provide a platform to a viable and sustainable future,” they said.

“However, a reduction in the number of employees will, unfortunately, be necessary.”

The BRPs said they will engage labour, both organized and non-organized, to reach a solution necessary for a sustainable airline going forward.

“The decisions and actions announced today are aimed at improving SAA’s balance sheet, creating a platform for a strong and sustainable airline and ensuring that the company is more attractive for potential strategic equity partners,” they said.

Now read: SA Express ordered to enter business rescue

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Massive flight cuts at SAA